Jess Penny explains how she believes the Apprenticeship Levy will help close the manufacturing skills gap
The shortage of senior, highly-skilled engineers in the UK has been highlighted by figures released in the latest manufacturing purchasing managers’ index (PMI), which, following the EU referendum, reached its lowest level in more than three years.
Many people still see manufacturing as a dark, dirty and even dangerous industry. Most students at secondary school level recognise that science and math subjects could be useful for getting a good job. However, far fewer feel such jobs are attainable or relevant. To add to the problem, the profile of those who do go on to study Science, Technology, Engineering and Maths (STEM) subjects is too narrow, meaning those industries are missing out on the many benefits of a more diverse workforce.
A strong British engineering sector is vital to our long-term economic recovery, and increasing the supply of engineers is at the heart of this. As a country we excel in hi-tech industries but we need engineers to make sure the UK stays ahead of our competitors. The rest of the world is not stagnant, so we must do everything we can to uphold our position as a leading engineering nation. The government's Engineering UK report finds that engineering businesses have the potential to contribute an extra £27bn to the UK economy every year from 2022 if we can meet the demand for a quarter of a million new vacancies in the same timeframe.
Businesses and government bodies are already working hard to attract and retain talent within their workforce, but there is always more that can be done.
As employers, we must take steps to narrow the skills gap now. This means ensuring existing employees are upskilled and committed to finding new talent, both of which will help future proof businesses.
Apprenticeships offer substantial training and the development of transferable skills. Most training is on-the-job working with a mentor, to learn job specific skills in the workplace. This means that technical skills vital to business performance and growth are gained and strengthened, helping to develop our industry as a whole. Apprenticeships bring opportunity; to attract new talent, offer progression and develop a motivated, skilled and qualified workforce.
Moving towards employer-led standards
In April 2017, a new levy will require all companies that operate in England with an annual payroll of over £3m to pay 0.5% of their payroll towards funding apprenticeships. The levy will support the existing frameworks as they move towards employer-led standards, a change that expected to be complete by 2020.
To formulate a new Apprenticeship Standard, 10 companies must design and submit the standard for approval. This standard can then be used by the company who submitted it, as well as every other companies in the UK. The overall idea being that the levy will support the government's commitment to improving productivity by increasing the quantity and quality of apprenticeships.
Employers need to take a leap of faith and make the extra investment on supporting new applicants, so they can deliver the skills needed for the business and industry in the long term. The levy could be very powerful for closing the skills gap in the manufacturing industry. Some of the investment is a sunk cost which lowers the threshold for making the business case to recruit apprentices.
The Apprenticeship Levy will not solve all of our skills problems, but a supply of thousands of skilled apprentices every year will make a positive difference. The levy will most definitely help to transform the skills landscape in the UK manufacturing industry.
Making career choices within the sector more inviting
A positive image of the sector portrayed by the media is vital and helping to change the public perception of the industry will make a career within the sector more inviting.
To accelerate this process, the government must help businesses by promoting employment on every level. Building on existing programmes will positively influence the perceptions and subject choices of young people and get more of them interested in a career in engineering.
Education programmes such as Tomorrow's Engineers have made it clear that this is best achieved through collaboration and support from local, regional and national STEM employers. Government, working in partnership with business, the education sector and the engineering community, needs to ensure the provision of a national coordinated employer–led, informed and relevant approach to careers inspiration in educational establishments.
It is not unreasonable to believe that every child should have an engineering experience linked to careers and the curriculum, with all schools and colleges being held to account through their relevant inspection authority. This should in turn help us achieve the latest government target of a two-fold increase in the number of Advanced Apprenticeship achievements in engineering and manufacturing technology, which will be fundamental in us meeting the forecasted demand for skilled engineers by 2022.
Jess Penny is general manager of Penny Hydraulics